Bank of America 2015 Annual Report Download - page 206

204 Bank of America 2015
NOTE 13 Shareholders’ Equity
Common Stock
Declared Quarterly Cash Dividends on Common Stock (1)
Declaration Date Record Date Payment Date
Dividend
Per Share
January 21, 2016 March 4, 2016 March 25, 2016 $ 0.05
October 22, 2015 December 4, 2015 December 24, 2015 0.05
July 23, 2015 September 4, 2015 September 25, 2015 0.05
April 16, 2015 June 5, 2015 June 26, 2015 0.05
February 10, 2015 March 6, 2015 March 27, 2015 0.05
(1) In 2015 and through February 24, 2016.
On March 11, 2015, the Corporation announced that the
Federal Reserve completed its 2015 Comprehensive Capital
Analysis and Review (CCAR) and advised that it did not object to
the 2015 capital plan but gave a conditional non-objection under
which the Corporation was required to resubmit its CCAR capital
plan by September 30, 2015 and address certain weaknesses the
Federal Reserve identified in the Corporation’s capital planning
process. The requested capital actions included a request to
repurchase $4.0 billion of common stock over five quarters
beginning in the second quarter of 2015, and to maintain the
quarterly common stock dividend at the current rate of $0.05 per
share. The Corporation resubmitted its CCAR capital plan on
September 30, 2015 and on December 10, 2015, the Federal
Reserve announced that it did not object to the resubmitted CCAR
capital plan.
In 2015, the Corporation repurchased and retired 140.3 million
shares of common stock in connection with the 2015 capital plan,
which reduced shareholders’ equity by $2.4 billion. In 2014 and
2013, the Corporation repurchased and retired 101.1 million and
231.7 million shares of common stock, which reduced
shareholders’ equity by $1.7 billion and $3.2 billion.
At December 31, 2015, the Corporation had warrants
outstanding and exercisable to purchase 121.8 million shares of
its common stock at an exercise price of $30.79 per share expiring
on October 28, 2018, and warrants outstanding and exercisable
to purchase 150.4 million shares of common stock at an exercise
price of $13.107 per share expiring on January 16, 2019. These
warrants were originally issued in connection with preferred stock
issuances to the U.S. Department of the Treasury in 2009 and
2008, and are listed on the New York Stock Exchange. The exercise
price of the warrants expiring on January 16, 2019 is subject to
continued adjustment each time the quarterly cash dividend is in
excess of $0.01 per common share to compensate the holders
of the warrants for dilution resulting from an increased dividend.
The Corporation had cash dividends of $0.05 per share per quarter,
or $0.20 per share for the year, in 2015 resulting in an adjustment
to the exercise price of these warrants in each quarter. As a result
of the Corporation’s 2015 dividends of $0.20 per common share,
the exercise price of these warrants was adjusted to $13.107.
The warrants expiring on October 28, 2018 also contain this anti-
dilution provision except the adjustment is triggered only when the
Corporation declares quarterly dividends at a level greater than
$0.32 per common share.
In connection with the issuance of the Corporation’s 6%
Cumulative Perpetual Preferred Stock, Series T (the Series T
Preferred Stock), the Corporation issued a warrant to purchase
700 million shares of the Corporation’s common stock. The
warrant is exercisable at the holder’s option at any time, in whole
or in part, until September 1, 2021, at an exercise price of
$7.142857 per share of common stock. The warrant may be
settled in cash or by exchanging all or a portion of the Series T
Preferred Stock. For more information on the Series T Preferred
Stock, see Preferred Stock in this Note.
In connection with employee stock plans, in 2015, the
Corporation issued approximately 7 million shares and
repurchased approximately 3 million shares of its common stock
to satisfy tax withholding obligations. At December 31, 2015, the
Corporation had reserved 1.6 billion unissued shares of common
stock for future issuances under employee stock plans, common
stock warrants, convertible notes and preferred stock.